The technology sector in Washington, D.C. is booming these days and the city’s Democrat mayor, Muriel Bowser, attributed its success to the free market.
Speaking to a ballroom full of the city’s prominent businessmen and women at an Economic Club of Washington, D.C. luncheon Wednesday, Bowser said the large rise in tech companies opening up shop in the district over the last decade is due in large part to the government just letting them be.
“Part of our economic development strategy is supporting innovation and entrepreneurship,” Bowser said in her speech. “We are a tech capital because we’ve gotten out of the way for the tech community.”
Steven Giachetti, the director of revenue estimation in D.C.’s Office of Revenue Analysis, said the number of patents issued is a good proxy for innovation growth because high-tech sectors like biotechnology and computer systems design companies “spin-off” a lot of patents.
“There’s not a lot of patents in the retail sector,” he said. “If you look at the patent statistics, most of it comes from the high-tech sector.”
In 2013, the Washington, D.C. area ranked 16th out of 374 metropolitan areas in the country in the number of patents issued, with just over 2000, according to data from the U.S. Patent and Trademark Office. But, in terms of growth from 2003 to 2013, the district fared far better, ranking sixth in the nation with a 72 percent rate of growth during that time period.
Powerhouse technology cities like San Jose, home of silicon valley, and San Francisco far outpaced D.C. and all other cities in terms of patents issued and, aside from Seattle, growth over time, but the mayor said she is working to address that.
“We’ve seen tech grow organically here in the district and now i think we’re at a point where we have to figure out what it’s really going to take to attract and attain more small businesses in tech,” Bowser said.
One of the obvious reasons a person chooses one location over another is money, and D.C. has a lot of money.
Dice.com, a company that helps tech workers find new employment opportunities, also tracks the growth of salaries in the tech sector. In a study released earlier this year, the company showed that Washington, D.C. ranked number three in the country, falling just short of Seattle and Silicon Valley.
The average salary in D.C. in 2014 was $98,323, which is about nine percent higher than the national average of $89,450.
“It is not apparent that the cost of doing business or taxes are the dominant drivers for where the innovation process occurs,” Giachetti said in a post on his agency’s blog. Adding that the top three markets San Jose, San Francisco, and New York have high tax burdens.
Giachetti said he thinks tech growth is mostly spurred by the presence of world-class universities and research institutions, which are pretty prevalent in D.C.
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